NEW DELHI: Oil prices steadied in early Asian trade on Thursday, finding footing a day after a steep decline triggered by signs that Saudi Arabia could increase output and data showing the U.S. economy contracted.
Brent crude futures gained 7 cents, or 0.1%, at $61.13 a barrel as at 0318 GMT. U.S. West Texas Intermediate crude futures were up 1 cent or 0.02%, at $58.22. WTI closed at its lowest since March 2021 on Wednesday.
"In the near term, the path of least resistance remains tilted to the downside," said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
"The dual impact of deteriorating demand and looming supply expansion has created a pessimistic outlook for crude, with Brent crude appearing vulnerable to test $55 per barrel," Sachdeva said. Saudi Arabia is telling allies and industry experts that it is unwilling to prop up the oil market with supply cuts and can manage a prolonged period of low prices, sources told Reuters.
Several OPEC+ members will suggest the group accelerates output hikes in June for a second consecutive month, three people familiar with OPEC+ talks have said. Eight OPEC+ countries will meet on May 5 to decide a June output plan.
"Any surprise in the pace or scale of production adjustments could significantly influence volatility in the sessions ahead," Sachdeva said.
In the U.S., the world's biggest oil consumer, the economy contracted for the first time in three years in the first quarter, swamped by a flood of imports as businesses raced to avoid higher costs from tariffs and underscoring the disruptive nature of President Donald Trump's often chaotic trade policy.
Trump's tariffs have made it probable the global economy will slip into recession this year, a Reuters poll suggested. A demand outlook clouded by trade disputes coupled with an OPEC+ decision to increase supply will weigh on oil prices this year, a Reuters poll showed on Wednesday.
Analytics firm Kpler has revised its 2025 global oil demand growth forecast to 640,000 barrels per day from 800,000 bpd, citing rising Sino-U.S. trade tension and weak Indian demand.
A survey of 40 economists and analysts in April projected Brent crude to average $68.98 a barrel in 2025, versus March's estimate of $72.94. They expect U.S. crude to average $65.08 a barrel rather than $69.16 seen last month.
U.S. crude oil stockpiles fell by 2.7 million barrels last week on higher export and refinery demand, the Energy Information Administration said on Wednesday. That compared with analysts' expectations in a Reuters poll for a 429,000 barrel rise. - Reuters
